The Net Asset Value (NAV) of IGF increased by +3.0% in July as the MSCI World Net Total Return Index edged up by +0.3% (MUR terms). The SEMTRI outperformed global equities for a second month in a row, with the local equity benchmark increasing by +2.1%. Top 3 contributors to the performance of IGF were the positions in Shell, TotalEnergies, and Gavekal Global Equities. Top 3 detractors were the positions in Gavekal Asian Opportunities, Phoenix Beverages, and Stride.

Clashes between the U.S. and Iran flared up again in July, leading to Brent crude oil prices spiralling higher by +23.5% (USD terms). Brent crack spreads, a measure for the premium of refined gasoil over crude oil, hit a high of USD 65.67 during the month, compared to USD 42.57 at the end of June. As a result, global inflation could remain higher for longer if refinery capacity in the Middle East is not swiftly brought back into the global economy. Apart from geopolitical tensions, global equity markets were moved by the earnings season for the second quarter of the calendar year as well as question marks on capital expenditure for artificial intelligence (AI). Quarterly earnings releases of large global companies were overall strong, pointing towards a robust economic environment. Earnings quality of several leading technology firms was however second-guessed by many analysts as earnings growth is increasingly driven by other income from unrealised gains on equity investments. Despite stellar reported earnings, shares of large semiconductor firms saw heavy profit-taking in July. The Kospi Index in South Korea, an important barometer for the semiconductor industry, dropped by -16.2% (USD terms). Shares of Korean bellwether Samsung Electronics are now trading at only 4.8x expected earnings for FY 2026, a witness for increased scepticism on financial sustainability of current AI capital expenditure.

During July, IGF has further aligned its portfolio with the portfolio construction framework developed by Gavekal. This will lead to gradual changes in the portfolio in the coming months, including a more prominent use of liquid exchange-traded funds (ETFs). These changes are benefitting IGF shareholders as an investment into IGF provides access to the combined portfolio management capabilities of an international investment firm.

As always, we remain available to address any questions you may have.